CONFIDENTIAL

FM HONG KONG

TO IMMEDIATE FCO

TELNO 862

OF 230506Z MARCH 92

CONFIDENTIAL

Pa

Myiz 107/1

18

015154

MDHIAN 7746

Tala cary dccnsider outer.

2313

NORTH KOREA: OBSERVER STATUS AT 1992 ASIAN DEVELOPMENT BANK (ADB) ANNUAL MEETING IN HONG KONG.

1. ON 20 MARCH LOCAL U.S. CONSULATE GENERAL (USCG) OFFICIALS CALLED ON THE SECRETARY FOR MONETARY AFFAIRS TO LOBBY THE SUPPORT OF HONG KONG, AS THE CURRENT CHAIRMAN OF THE ADB BOARD OF GOVERNORS, OF THE U.S. POSITION THAT NORTH KOREA SHOULD NOT BE INVITED TO BE AN OBSERVER AT THE COMING ADB ANNUAL MEETING ON 4-6 MAY 1992. THE U.S. IS LINKING THIS ISSUE WITH NORTH KOREA'S RATIFICATION OF THE INTERNATIONAL ATOMIC ENERGY AGENCY'S AGREEMENT CONCERNING NUCLEAR SAFEGUARDS AND NON-PROLIFERATION. THE U.S. SPEAKING NOTE IS BEING FAXED TO YOU.

2. WE UNDERSTAND FROM THE ADB THAT NORTH KOREA HAVE ON SEVERAL OCCASIONS INFORMALLY SOUNDED OUT THE BANK REGARDING THE POSSIBILITY FOR ITS MEMBERSHIP. HOWEVER, NORTH KOREA HAS TO DATE NOT FILED ANY APPLICATION WITH THE ADB TO SEEK MEMBERSHIP OR OBSERVER STATUS. IN FEBRUARY 92 THE ADB SECRETARY REPORTED TO AN INFORMAL MEETING OF THE ADB BOARD OF DIRECTORS ABOUT THE LATEST PROBE FROM NORTH KOREA, CONVEYED BY A UNDP REPRESENTATIVE: THERE WAS HOWEVER NO SUGGESTION THAT THE BOARD WOULD NEED TO TAKE

ACTION ON THIS INFORMAL SOUNDING.

3. THE ADB UNDERSTANDS THAT NORTH KOREA IS SEEMINGLY QUITE CLOSE TO SECURING ESCAP MEMBERSHIP AND MIGHT GET IT IN TIME FOR THE ESCAP MEETING TO BE HELD IN BEIJING ON 14-23 APRIL. IN THAT CASE, NORTH KOREA MIGHT BE BETTER PLACED TO APPROACH THE ADB ON MEMBERSHIP OR OBSERVER STATUS.

4. FOR THE PRESENT, IN THE ABSENCE OF AN OFFICIAL APPROACH FROM NORTH KOREA TO THE BANK, THE QUESTION OF HONG KONG HAVING TO TAKE A POSITION ON THE ISSUE DOES NOT ARISE AND WE INTEND TO SO TELL THE USCG. IF NORTH KOREA SHOULD MAKE A MOVE THAT REQUIRES US TO TAKE A VIEW ON THE MATTER, WE WOULD CONSULT YOU.

5. MEANWHILE, GRATEFUL TO KNOW IF YOU HAVE ANY COMMENTS OR GUIDANCE ON THE MATTER BEFORE WE REVERT TO THE USCG.

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CONFIDENTIAL

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